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In re Synergy Natural Resources, LLC

Court of Appeals of Texas, Fourth District, San Antonio

January 10, 2018

IN RE SYNERGY NATURAL RESOURCES, LLC, Trailers for Less, and Gary M. Riebschlager

         Original Mandamus Proceeding [1]

          Sitting: Rebeca C. Martinez, Justice, Patricia O. Alvarez, Justice Luz Elena D. Chapa, Justice.

          MEMORANDUM OPINION

          Rebeca C. Martinez, Justice

         Relators Synergy Natural Resources, L.L.C., Trailers for Less, and Gary M. Riebschlager filed a petition for writ of mandamus, complaining the trial court abused its discretion in granting real party in interest Circle Bar A Inc.'s motion to disqualify counsel. We conditionally grant the petition for writ of mandamus.

         Background

         Circle Bar A Inc. ("CBA") filed suit against Synergy Natural Resources, L.L.C. ("Synergy") asserting claims for suit on a sworn account and breach of contract for alleged failure to pay transfer and storage fees for two chassis trailers. Synergy claims it was never served with CBA's petition, and on May 4, 2017, a no-answer default judgment awarding damages and attorney's fees was rendered in favor of CBA. On July 14, 2017, the trial court issued a writ of execution against the two trailers held by CBA. On July 18, 2017, Synergy was attempting to retrieve the trailers from CBA on behalf of their owner, Trailers for Less. At that time, Synergy learned that a default judgment had been entered against it and later learned a writ of execution had been issued and the trailers were seized by the Bexar County Sheriff's Office.

         On August 4, 2017, attorney Gary M. Riebschlager filed a motion to dissolve writ of execution on behalf of intervenor and interested third party, Trailers for Less, which owns the two trailers at issue. Attached to the motion was the affidavit of Michelle Walker, custodian of business records for Trailers for Less, who stated that Synergy leased the trailers from Trailers for Less.

         On August 10, 2017, a hearing was held on the motion to dissolve writ of execution filed by Trailers for Less. During the hearing, CBA presented a motion to disqualify Riebschlager from representing both Synergy and Trailers for Less pursuant to Rule 1.06.[2] CBA's attorney informed the trial court he had learned through email communication with Riebschlager that Riebschlager was representing two clients whose interests were adverse-Synergy and Trailers for Less. CBA argued that both entities claimed to own the trailers at issue, and their conflicting positions should disqualify Riebschlager from representing either. No evidence was admitted during the hearing relative to the motion to disqualify other than the email correspondence between CBA's attorney and Riebschlager which was also attached to the motion to disqualify.

         At the conclusion of the hearing, the trial court pronounced the motion to disqualify granted. Riebschlager asked the court if he could file a response to the motion to disqualify, since he was not served with the motion prior to the hearing. The trial court allowed Riebschlager to file a response. The trial court subsequently signed an order granting CBA's motion to disqualify Riebschlager from representing Synergy and Trailers for Less. The order is file-stamped August 10, 2017 at 3:38 p.m., but was signed on "August 11, 2017." On August 11, 2017, on behalf of Synergy, Riebschlager filed a motion for new trial of the court's no-answer default judgment signed on May 4, 2017. The motion is file-stamped 2:27 p.m. An attorney affiliated with Riebschlager's office, Martina Cartwright, added her signature to the motion for new trial on behalf of Synergy, and also filed a notice of appearance and motion to dissolve writ of execution on behalf of Trailers for Less.

         On August 18, 2017, CBA filed its motion for sanctions and contempt against Riebschlager, as well as a motion to disqualify as to Martina Cartwright's appearance. A hearing was held on the motion for sanctions but Riebschlager did not appear; his motion for continuance was not considered. The trial court granted the motion for sanctions and ordered Riebschlager to pay $2, 500 in attorney's fees. The trial court also struck Synergy's motion for new trial as to the no-answer default judgment filed by Riebschlager.

         Analysis

         Mandamus relief is an extraordinary remedy. In re Sw. Bell Tel. Co., L.P., 235 S.W.3d 619, 623 (Tex. 2007) (orig. proceeding). Mandamus will issue only to correct a clear abuse of discretion when there is no other adequate remedy by appeal. See In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex. 2004) (orig. proceeding); Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding) (quoting Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex. 1985) (orig. proceeding)). A trial court abuses its discretion if it reaches a decision so arbitrary and unreasonable that it constitutes a clear and prejudicial error of law, or if it clearly fails to correctly analyze or apply the law. In re Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding); Walker, 827 S.W.2d at 839. To satisfy the clear abuse of discretion standard, the relator must show "that the trial court could reasonably have reached only one decision." Liberty Nat'l First Ins. Co. v. Akin, 927 S.W.2d 627, 630 (Tex. 1996) (orig. proceeding) (quoting Walker, 827 S.W.2d at 840).

         Mandamus is appropriate to correct an erroneous order disqualifying counsel because there is no adequate remedy by appeal. In re Sanders, 153 S.W.3d 54, 56 (Tex. 2004) (orig. proceeding); In re Sandoval, 308 S.W.3d 31, 32 (Tex. App.-San Antonio 2009, orig. proceeding). Disqualification is a severe remedy because it can cause immediate harm by depriving a party of its chosen counsel and disrupting court proceedings. In re Sanders, 153 S.W.3d at 57. Courts must adhere to an exacting standard when considering motions to disqualify so as to discourage their use as a dilatory trial tactic. Spears v. Fourth Court of Appeals, 797 S.W.2d 654, 656 (Tex. 1990) (orig. proceeding). The party moving for disqualification must establish with specificity a violation of one or more of the disciplinary rules. Id. The disciplinary rules provide guidelines for deciding disqualification issues; however, they are not controlling standards. In re Drake, 195 S.W.3d 232, 235 (Tex. App.-San Antonio 2006, orig. proceeding). In "appropriate circumstances" a lawyer may be disqualified even if he has not violated a specific disciplinary rule. In re Nitla S.A. de C.V., 92 S.W.3d 419, 422 (Tex. 2002) (orig. proceeding). By ...


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